Bottom Line The expanded accounting equation offers a comprehensive framework for understanding how financial activities impact a company's overall financial standing.

A linear equation is drawn as a straight line on a set of axes. To draw the graph we need coordinates. We generate these coordinates by substituting values into the linear equation.

Once the equilibrium price is known, you can then use the information to calculate the demand equation. Some diminishing demands are linear and decline at a fixed rate.

The expanded accounting equation builds upon the basic accounting equation's use of assets, liabilities and equity by incorporating additional components such as revenues, expenses and withdrawals.